数字理论 (The digital theory)

Hello.

Time for another of my out of the box perspectives.

First thing: Stop thinking in terms of candlesticks. We are going to convert the analog signal (candlestick charts) into a digital display.

The idea is to picture the chart as a grid of squares. If the price passes certain thresholds over time intervals, it will get filled in blue.

The way I look at it, GBPJPY's volatilty is the same as GBPUSD, only the forex Gods chose to make the pip at the 1/100 yen instead of the 1/10 of a yen. What if the GBPUSD's pip value were 1/1,000 of a cent instead of 1/100? People would flock to GBPUSD because the volatility is high and pips would compare to Guppy.

What if I can look at GBPJPY as 50 pips = 1 pip? That's what a blue block on the graph is.... it is 1 pip in my mind. With this rational, GBPJPY moving 300 pips is the same as 6 pips to me.

So if I have a nice scalping program, I can trade 50 pip moves as if they were 1 pip without the broker getting angry.

Remember: It's all about volatility. The only reason I can consider this mentality is that GBPJPY moves a lot.